Nike Inc.’s results cheered Wall Street Friday as the stock notched double-digit percentage gains on its stronger-than-expected results and positive outlook.
Raymond James reiterated an outperform rating on Nike
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in a chorus of praise from analysts about the athletic footwear and apparel giant’s future prospects.
Nike’s stock was up by 10% in premarket trades on Friday.
“Nike can drive better growth and margin expansion beyond FY24 on its structural shift towards Direct,” analyst Rick Patel said in a research note.
Patel also sounded some cautious notes on Nike as well.
“We still see FY24 as a year with slower growth (tough N. America Wholesale compares) but strong margin expansion (easing transitory headwinds, better efficiencies),” Patel said.
Meanwhile, Oppenheimer analyst Brian Nagel reiterated an outperform rating on Nike and said the company’s groundwork “is now established to support strengthening sales and margins trends” in coming quarters.
“We continue to view underlying market sentiment embedded within NKE shares as too pessimistic and inconsistent with indications of ongoing, superb fundamental prowess at the company,” Nagel said.
Wedbush analyst Tom Nikic reiterated an outperform rating on Nike and said the company’s swooshes are realigning, with a re-acceleration in view for the second half of its fiscal year.
“Demand [is] still strong despite the tough macro,” Nikic said. “Margins [are] benefitting from tighter inventories and focus on full-price selling.”
Wedbush’s Nikic said Nike also got a boost from strong back-to-school trends both in the U.S. and China.
“We believe that inventory levels in the channel are becoming cleaner, which will support re-acceleration in fiscal 2H,” Nikic said. “We remain positive on this bellwether name.”
Also read: Adidas and Puma shares rally after Nike results
